LBD12288-02-0
S. 8338 2
RELY LESS ON SOURCES OF ENERGY THAT HAVE A DETRIMENTAL EFFECT ON AIR
QUALITY, TO IMPROVE THE CLEANLINESS OF THE AIR IN THE STATE AND THEREBY
TO CONTRIBUTE TO THE HEALTH AND WELL-BEING OF THE PEOPLE OF THE STATE.
TO ACHIEVE SUCH POLICY GOALS, THE LEGISLATURE FINDS THAT IT IS NECES-
SARY FOR THE STATE TO FACILITATE THE FINANCING OF RENEWABLE ENERGY
SYSTEMS AND ENERGY EFFICIENCY IMPROVEMENTS. FOR MANY BUILDING OWNERS,
TRADITIONAL SOURCES OF FINANCING ARE EITHER TOO EXPENSIVE OR SIMPLY
UNAVAILABLE TO PAY FOR THE COSTS OF INSTALLING RENEWABLE ENERGY SYSTEMS
AND ENERGY EFFICIENCY IMPROVEMENTS. WIDESPREAD DEPLOYMENT OF SUCH MEAS-
URES CAN ONLY BE ACHIEVED WITH READILY AVAILABLE, COST-EFFECTIVE FINANC-
ING TO MEET THE NEED FOR SUCH INITIAL CAPITAL INVESTMENTS.
THE LEGISLATURE DECLARES THAT IT IS NECESSARY FOR THE NEW YORK STATE
ENERGY RESEARCH AND DEVELOPMENT AUTHORITY AND MUNICIPAL CORPORATIONS TO
PLAY A CRITICAL ROLE IN FULFILLING THIS IMPORTANT PUBLIC PURPOSE BY
PROVIDING COST-EFFECTIVE FINANCING TO PROPERTY OWNERS FOR THE LARGE-SCA-
LE INSTALLATION OF SUCH RENEWABLE ENERGY SYSTEMS AND ENERGY EFFICIENCY
MEASURES, FOR THE IMMEDIATE PROTECTION OF THE PUBLIC INTEREST AND FOR
THE IMPLEMENTATION OF THE STATE'S GREENHOUSE GAS REDUCTION PLANS; AND
THAT THE PROVISIONS OF THIS ARTICLE ARE NECESSARY AND APPROPRIATE TO
ACCOMPLISH THESE SIGNIFICANT AND LEGITIMATE PUBLIC PURPOSES.
S 3. Section 119-ff of the general municipal law, as added by chapter
497 of the laws of 2009, is amended to read as follows:
S 119-ff. Definitions. For purposes of this article:
1. "Authority" means the New York state energy research and develop-
ment authority, as defined by subdivision two of section eighteen
hundred fifty-one of the public authorities law, or its successor.
2. "BOND" MEANS A BOND, NOTE OR OTHER EVIDENCE OF INDEBTEDNESS, ISSUED
TO FINANCE OR REFINANCE A SUSTAINABLE ENERGY FINANCING PROGRAM OR ANY
PORTION THEREOF.
3. "Credit support" means and includes EQUITY CONTRIBUTIONS, direct
loans, letters OR LINES of credit, [loan] guarantees, and insurance
products; and the purchase of or commitment to purchase, or the sale of
or commitment to sell, debt instruments, including subordinated securi-
ties; AND RESERVE OR OVER COLLATERALIZATION ACCOUNTS, SURETY BONDS AND
OTHER MECHANISMS DESIGNED TO PROMOTE THE CREDIT QUALITY AND MARKETABILI-
TY OF THE FINANCINGS.
[3] 4. "Energy audit" means a formal evaluation of the energy consump-
tion of a permanent building or structural improvement to real property,
conducted by a contractor certified by the authority, or certified by a
certifying entity approved by the authority for purposes of this arti-
cle, for the purpose of identifying appropriate energy efficiency
improvements that could be made to the property. A municipal corporation
may, by local law, provide for the certification of such contractors
based upon criteria at least as stringent as the state-wide criteria for
certification adopted by the authority for purposes of this article.
[4] 5. "Energy efficiency improvement" means and includes any reno-
vation or retrofitting of a building to reduce energy consumption, such
as window and door replacement, lighting, caulking, weatherstripping,
air sealing, insulation, and heating and cooling system upgrades, and
similar improvements, determined to be cost-effective pursuant to crite-
ria established by the authority. WITH RESPECT TO ONE TO FOUR FAMILY
RESIDENTIAL PROPERTIES, THE TERM "ENERGY EFFICIENCY IMPROVEMENT" MAY
INCLUDE ANY HEALTH AND SAFETY RELATED REPAIRS THAT ARE REQUIRED TO BE
MADE IN CONJUNCTION WITH OTHER ENERGY EFFICIENCY IMPROVEMENTS IN ORDER
TO CONFORM WITH THE STANDARDS OF THE CERTIFYING ENTITY DESCRIBED IN
SUBDIVISION FOUR OF THIS SECTION. However, "energy efficiency improve-
S. 8338 3
ment" shall not include lighting measures or household appliances that
are not permanently fixed to real property. IN ANY CITY HAVING A POPU-
LATION OF ONE MILLION OR MORE PERSONS, SUCH CITY MAY, BY LOCAL LAW, OR
BY RULE PROMULGATED PURSUANT TO SUCH LOCAL LAW, ESTABLISH SUCH CRITERIA,
AS WELL AS LISTS OF COST-EFFECTIVE ENERGY EFFICIENCY IMPROVEMENTS, AS
DETERMINED TO BE APPROPRIATE FOR ITS SUSTAINABLE ENERGY FINANCING
PROGRAM.
6. "FINANCING" MEANS AND INCLUDES PROVIDING FUNDS FOR ENERGY EFFICIEN-
CY IMPROVEMENTS AND RENEWABLE ENERGY SYSTEMS AS PRESCRIBED IN THIS ARTI-
CLE.
7. "GREEN JOBS - GREEN NEW YORK FUND" MEANS: THE FUND ESTABLISHED
PURSUANT TO SUBDIVISION EIGHTEEN OF SECTION EIGHTEEN HUNDRED FIFTY-FOUR
OF THE PUBLIC AUTHORITIES LAW.
8. "ISSUER" MEANS THE ISSUER OF A BOND.
[5] 9. "Municipal corporation" means a county, town, city or village.
[6] 10. "Renewable energy system" means an energy generating system,
PERMANENTLY FIXED TO REAL PROPERTY, for the generation of electric or
thermal energy, to be used primarily at such property, by means of solar
thermal, solar photovoltaic, wind, geothermal, anaerobic digester gas-
to-electricity systems, fuel cell technologies, or other renewable ener-
gy technology approved by the authority not including the combustion or
pyrolysis of solid waste. IN ANY CITY HAVING A POPULATION OF ONE
MILLION OR MORE PERSONS, SUCH CITY MAY, BY LOCAL LAW, OR BY RULE PROMUL-
GATED PURSUANT TO SUCH LOCAL LAW, APPROVE OTHER RENEWABLE ENERGY TECH-
NOLOGY NOT INCLUDING THE COMBUSTION OR PYROLYSIS OF SOLID WASTE, AS
DETERMINED TO BE APPROPRIATE.
[7] 11. "Renewable energy system feasibility study" means a written
study, conducted by a contractor certified by the authority, or certi-
fied by a certifying entity approved by the authority for purposes of
this article, for the purpose of determining the feasibility of install-
ing a renewable energy system. A municipal corporation may, by local
law, provide for the certification of such contractors based upon crite-
ria at least as stringent as the state-wide criteria for certification
adopted by the authority for purposes of this article.
S 4. Section 119-gg of the general municipal law, as added by chapter
497 of the laws of 2009, is amended to read as follows:
S 119-gg. Sustainable energy [loan] FINANCING program. 1. The legisla-
tive body of any municipal corporation may, by local law, establish a
sustainable energy [loan] FINANCING program using [federal grant assist-
ance or], WITHOUT LIMITATION, FEDERAL GRANT ASSISTANCE, federal credit
support OR ANY OTHER GRANTS available for this purpose; AND FOR MUNICI-
PAL CORPORATIONS WITH THE POWER TO ENFORCE DELINQUENT TAX LIENS, USING
PROCEEDS FROM BONDS ISSUED BY THE AUTHORITY, OR ANY OTHER GRANTS, OTHER
MONIES, INCLUDING, WITHOUT LIMITATION, AUTHORITY MONIES HELD IN THE
GREEN JOBS - GREEN NEW YORK FUND, OR CREDIT SUPPORT MADE AVAILABLE BY
THE AUTHORITY.
2. Such program may [make loans] PROVIDE FINANCING to the owners of
real property located within the municipal corporation [to finance] FOR
the installation of renewable energy systems and energy efficiency
improvements, related energy audits and renewable energy system feasi-
bility studies, and the verification of the installation of such systems
and improvements. No municipal corporation shall make OR PROVIDE FOR
such [a loan] FINANCING to an owner of property that has received [a
loan] FINANCING from OR PROVIDED FOR BY another municipal corporation
pursuant to this article FOR THE SAME ENERGY EFFICIENCY IMPROVEMENT OR
RENEWABLE ENERGY SYSTEM.
S. 8338 4
3. Each such local law establishing the sustainable energy [loan]
FINANCING program shall provide for the criteria for making such [loans]
FINANCING AVAILABLE and the terms and conditions for repayment of such
[loans] FINANCING, CONSISTENT WITH THIS ARTICLE. The sustainable energy
[loan] FINANCING program shall use such lists of cost effective energy
efficiency improvements for different building types as are approved by
the authority, OR IN ANY CITY HAVING A POPULATION OF ONE MILLION OR MORE
PERSONS, AS ARE ESTABLISHED BY SUCH CITY BY LOCAL LAW, OR BY RULE
PROMULGATED PURSUANT TO SUCH LOCAL LAW.
4. The municipal corporation shall verify and report on the installa-
tion and performance of renewable energy systems and energy efficiency
improvements financed by the [loan] FINANCING program in such form and
manner as the authority may establish. IN ANY CITY HAVING A POPULATION
OF ONE MILLION OR MORE PERSONS, SUCH CITY MAY, BY LOCAL LAW OR BY RULE
PROMULGATED PURSUANT TO SUCH LOCAL LAW, ESTABLISH A SYSTEM FOR VERIFYING
AND REPORTING ON THE INSTALLATION AND PERFORMANCE OF RENEWABLE ENERGY
SYSTEMS AND ENERGY EFFICIENCY IMPROVEMENTS FINANCED BY ITS PROGRAM.
5. Every [loan] FINANCING made OR PROVIDED under the sustainable ener-
gy [loan] FINANCING program shall be repaid over a term not to exceed
the weighted average of the useful life of such systems and improvements
as determined by the municipal corporation OR BY THE AUTHORITY PURSUANT
TO AGREEMENT WITH THE MUNICIPAL CORPORATION. The municipal corporation
shall set a fixed rate of interest for the TIMELY repayment of the prin-
cipal amount of each [loan] FINANCING at the time the [loan is made]
FINANCING IS COMPLETED.
6. The principal amount of each such [loan] FINANCING BY THE MUNICIPAL
CORPORATION, excluding interest, shall not exceed the lesser of ten
percent of the [appraised real property] FAIR MARKET value OF THE
SUBJECT REAL PROPERTY, AS DETERMINED BY THE MUNICIPAL CORPORATION OR BY
THE AUTHORITY PURSUANT TO AGREEMENT WITH THE MUNICIPAL CORPORATION, or
the actual cost of installing the renewable energy system and energy
efficiency improvements[, including]. FINANCINGS PROVIDED PURSUANT TO
THIS ARTICLE MAY INCLUDE the costs of necessary equipment, materials,
and labor, the costs of each related energy audit and renewable energy
system feasibility study, [and] the cost of verification of such renewa-
ble energy system and energy efficiency improvements, ISSUANCE COSTS OF
BONDS, THE COSTS OF CREDIT SUPPORT AND ALL OTHER RELATED TRANSACTION AND
ADMINISTRATION COSTS.
7. No such [loan] FINANCING shall be made for energy efficiency
improvements unless determined to be appropriate through an energy
audit, and no such [loan] FINANCING shall be made for a renewable energy
system unless determined to be feasible through a renewable energy
system feasibility study.
8. [The loan made under the sustainable energy loan program shall
constitute a lien upon the real property benefitted by such loan.] (A) A
CHARGE IMPOSED PURSUANT TO THIS ARTICLE SHALL BE AND BECOME A LIEN ON
THE BENEFITTED PROPERTY AT THE SAME TIME AND IN THE SAME MANNER AS
MUNICIPAL TAXES. SUCH LIEN SHALL HAVE A PRIORITY OVER ALL OTHER LIENS
AND ENCUMBRANCES ON THE PROPERTY, EXCEPT FOR LIENS SECURING TAXES,
SPECIAL AD VALOREM LEVIES AND SPECIAL ASSESSMENTS.
(B) NOTWITHSTANDING PARAGRAPH (A) OF THIS SUBDIVISION, IN ANY CITY
HAVING A POPULATION OF ONE MILLION OR MORE PERSONS SUCH LIEN SHALL BE
SUBORDINATE TO THE LIEN OF TAXES, ASSESSMENTS, SEWER RENTS, SEWER
SURCHARGES AND WATER RENTS, AND THE INTEREST AND CHARGES THEREON, AND ON
PARITY WITH ANY LIEN ARISING FROM THE NONPAYMENT OF ANY OTHER CHARGES OF
SUCH CITY.
S. 8338 5
9. UPON THE ISSUANCE OF FINANCING PURSUANT TO THIS SECTION, A NOTICE
STATING THE EXISTENCE, DURATION AND AMOUNT THEREOF SHALL BE RECORDED BY
THE MUNICIPAL OFFICER RESPONSIBLE FOR ADMINISTERING THIS PROGRAM, OR HIS
OR HER DESIGNEE, WITH THE APPROPRIATE RECORDING OFFICER AS DEFINED BY
SECTION TWO HUNDRED NINETY OF THE REAL PROPERTY LAW, WHO SHALL BE ENTI-
TLED TO CHARGE SUCH FEE FOR SUCH RECORDING AS MAY BE AUTHORIZED BY
SECTION EIGHT THOUSAND TWENTY-ONE OF THE CIVIL PRACTICE LAW AND RULES OR
ANY APPLICABLE LOCAL LAW.
[9.] 10. The municipal corporation may require [the loan] ANY FINANC-
ING made under the sustainable energy [loan] FINANCING program to be
repaid by the property owner through a charge on the real property bene-
fitted by such [loan] FINANCING. Such charge shall be on the real prop-
erty and shall be levied and collected at the same time and in the same
manner as municipal taxes, provided that such charge shall be separately
listed on the tax bill, and provided further that in the event such
charge should not be paid in a timely manner, no other municipal corpo-
ration shall be required to credit or otherwise guarantee the amount of
such unpaid charge to the municipal corporation which authorized the
[loan] FINANCING, notwithstanding any provision of law to the contrary.
EXCEPT AS PROVIDED HEREIN, ALL PROVISIONS OF STATE AND LOCAL LAWS
REGARDING THE ENFORCEMENT AND COLLECTION OF UNPAID REAL PROPERTY TAXES
OF THE MUNICIPAL CORPORATION SHALL APPLY TO THE ENFORCEMENT AND
COLLECTION OF SUCH UNPAID CHARGES. ANY MUNICIPAL CORPORATION MAY ENTER
INTO AGREEMENTS WITH ANOTHER MUNICIPAL CORPORATION AND THE AUTHORITY
RELATING TO THE ADMINISTRATIVE FUNCTIONS OF THE FINANCING PROGRAM
INCLUDING, BUT NOT LIMITED TO, INCORPORATING REPAYMENT CHARGES ON TAX
BILLS, DETERMINING FAIR MARKET VALUES, PROVIDING NOTIFICATIONS WHEN SUCH
CHARGES HAVE NOT BEEN PAID AND COLLECTING UNPAID CHARGES; BUT NO TOWN,
VILLAGE OR CITY SHALL BE AUTHORIZED TO ENTER INTO ANY SUCH AGREEMENT
WITH ANY COUNTY OTHER THAN THE COUNTY IN WHICH SUCH TOWN, CITY OR
VILLAGE IS LOCATED.
11. EACH MUNICIPAL SUSTAINABLE ENERGY FINANCING PROGRAM SHALL
PRESCRIBE PROCESSES AND PROCEDURES TO PROVIDE UPFRONT DISCLOSURE OF ALL
TERMS AND CONDITIONS OF A FINANCING, INCLUDING (A) EFFECTS ASSOCIATED
WITH FAILING TO PAY THE CHARGE, (B) EFFECTS OF TRANSFERRING OWNERSHIP OF
THE PROPERTY, (C) THE APPROXIMATE MONTHLY AND YEARLY PAYMENT CHARGES
ASSOCIATED WITH THE FINANCING AND THE ESTIMATED MONTHLY ENERGY AND YEAR-
LY ENERGY SAVINGS FROM INSTALLATION OF THE RELATED ENERGY EFFICIENCY
IMPROVEMENT AND RENEWABLE ENERGY SYSTEM, BASED ON ENERGY USAGE AND PRIC-
ING AT THE TIME OF FINANCING, AND (D) NOTIFICATION TO THE AFFECTED MORT-
GAGEES OF THE CHARGE AND THE LIEN AS PRESCRIBED BY SUBDIVISION EIGHT OF
THIS SECTION AND AN OPPORTUNITY FOR SUCH MORTGAGEES TO BE HEARD ON THE
FINANCING'S COMPLIANCE WITH THIS ARTICLE.
12. EACH MUNICIPAL SUSTAINABLE ENERGY FINANCING PROGRAM SHALL INCLUDE
A NON-ACCELERATION PROVISION SO THAT FAILURE TO PAY A PROGRAM CHARGE
SHALL NOT CAUSE ACCELERATION OF FUTURE SCHEDULED CHARGES; BUT THIS
SUBDIVISION SHALL NOT PROHIBIT AGREEMENT BETWEEN THE PROPERTY OWNER AND
A SUBSEQUENT PURCHASER OF THE PROPERTY ON THE ALLOCATION AND TIMING OF
PAYMENT OF OVERDUE AND FUTURE SCHEDULED CHARGES BETWEEN SUCH PROPERTY
OWNER AND SUBSEQUENT PURCHASER AS THEY DEEM APPROPRIATE. EACH SUCH
PROGRAM SHALL ALSO REQUIRE OWNERS OF BENEFITTED PROPERTY TO PROVIDE
NOTICE OF A FINANCING UNDER THIS ARTICLE TO ANY SUBSEQUENT PURCHASER
PRIOR TO CONVEYANCE OF SUCH PROPERTY.
13. EACH MUNICIPAL SUSTAINABLE ENERGY FINANCING PROGRAM SHALL BE
LIMITED TO: (A) A MAXIMUM FINANCING AMOUNT THAT DOES NOT RESULT IN THE
AMOUNT OF THE PROPERTY OWNER'S TOTAL DEBT ON THE PROPERTY, INCLUDING THE
S. 8338 6
AMOUNT FINANCED, EXCEEDING NINETY PERCENT OF THE FAIR MARKET VALUE OF
THE PROPERTY, AS DETERMINED BY THE MUNICIPAL CORPORATION OR BY THE
AUTHORITY PURSUANT TO AGREEMENT WITH THE MUNICIPAL CORPORATION, (B) REAL
PROPERTY THAT HAS NO OUTSTANDING TAXES OR INVOLUNTARY LIENS, AND (C)
INSTALLED ENERGY EFFICIENCY IMPROVEMENTS AND RENEWABLE ENERGY SYSTEMS
THAT HAVE A SAVINGS-TO-INVESTMENT RATIO GREATER THAN ONE (AS DEFINED IN
GUIDANCE TO BE ISSUED BY THE AUTHORITY).
14. FINANCINGS SHALL ONLY BE AVAILABLE TO PROPERTY OWNERS THAT (A)
HAVE NOT FAILED TO PAY PROPERTY TAXES DURING THE INTEREST-FREE PERIOD
MORE THAN ONCE IN THE PAST THREE YEARS, OR ONCE SINCE THE PURCHASE OF
THE PROPERTY IF LESS THAN THREE YEARS, AND (B) HAVE NOT FILED FOR OR
DECLARED BANKRUPTCY DURING THE PREVIOUS SEVEN YEARS; AND NOTHING
CONTAINED HEREIN SHALL PROHIBIT A MUNICIPAL CORPORATION OR THE AUTHORITY
FROM ESTABLISHING ADDITIONAL ELIGIBILITY CRITERIA.
15. IN ORDER TO IMPLEMENT THE SUSTAINABLE ENERGY FINANCING PROGRAM,
THE AUTHORITY AND ANY MUNICIPAL CORPORATION WITH THE POWER TO ENFORCE
DELINQUENT TAX LIENS MAY ENTER INTO A CONTRACT UPON SUCH TERMS AND
CONDITIONS AS THE AUTHORITY AND SUCH MUNICIPAL CORPORATION SHALL DEEM
APPROPRIATE. SUCH CONTRACT MAY PROVIDE FOR THE AUTHORITY TO PROVIDE
FUNDING FOR FINANCINGS PURSUANT TO THIS SECTION AND FOR THE MUNICIPAL
CORPORATION TO TRANSFER OR ASSIGN TO THE AUTHORITY OR ITS DESIGNEE ANY
FUNDS RECEIVED BY THE MUNICIPAL CORPORATION AS A RESULT OF CHARGES
IMPOSED ON OWNERS OF REAL PROPERTY PURSUANT TO THIS SECTION. SUCH
CONTRACT SHALL NOT OBLIGATE THE MUNICIPAL CORPORATION TO MAKE ANY
PAYMENTS FOR ANY SUCH FINANCING BEYOND THE FUNDS RECEIVED BY THE MUNICI-
PAL CORPORATION AS A RESULT OF SUCH CHARGES IMPOSED ON OWNERS OF REAL
PROPERTY OR TO APPROPRIATE FUNDS FOR SUCH PURPOSE. SUCH CONTRACT MAY
ALSO PROVIDE FOR THE REIMBURSEMENT OF COSTS FROM ONE PARTY TO THE OTHER.
16. THE MUNICIPAL CORPORATION MAY ENTER INTO SUCH CONTRACTS WITH THIRD
PARTIES INCLUDING BUT NOT LIMITED TO OTHER MUNICIPAL CORPORATIONS AS MAY
BE NECESSARY OR APPROPRIATE TO IMPLEMENT THE SUSTAINABLE ENERGY FINANC-
ING PROGRAM UPON TERMS AND CONDITIONS DEEMED APPROPRIATE BY SUCH MUNICI-
PAL CORPORATION, PROVIDED THAT SUCH TERMS AND CONDITIONS ARE CONSISTENT
WITH ALL OF THE STANDARDS AND REQUIREMENTS SET FORTH IN THIS ARTICLE.
17. NOTHING IN THIS ARTICLE SHALL PREVENT A TOWN FROM ELECTING TO
PROCEED UNDER SECTION TWO HUNDRED NINE-I OF THE TOWN LAW.
S 5. The general municipal law is amended by adding two new sections
119-hh and 119-ii to read as follows:
S 119-HH. PROGRAM IN A CITY OF ONE MILLION OR MORE. WITH RESPECT TO
ANY CITY HAVING A POPULATION OF ONE MILLION OR MORE PERSONS:
1. THE CITY MAY PROVIDE CREDIT SUPPORT FOR THE PROGRAM AND MAY CAUSE
THE INCORPORATION OF ONE OR MORE CORPORATIONS UNDER THE NOT-FOR-PROFIT
CORPORATION LAW, OR THE ORGANIZATION OF OTHER ENTITIES, TO PROVIDE
ASSISTANCE TO SUCH CITY IN THE IMPLEMENTATION OF A SUSTAINABLE ENERGY
FINANCING PROGRAM, AND SUCH ASSISTANCE SHALL BE DEEMED TO LESSEN THE
BURDEN OF GOVERNMENT AND CONSTITUTE ACTION IN THE PUBLIC INTEREST; THE
CITY MAY CAUSE THE ISSUANCE OF BONDS BY SUCH CORPORATION OR OTHER ENTITY
AS ISSUER.
2. THE STATE DOES HEREBY PLEDGE AND AGREE WITH THE HOLDERS OF ANY
ISSUE OF BONDS SECURED BY SUCH A PLEDGE THAT THE STATE WILL NOT LIMIT OR
ALTER THE RIGHTS VESTED BY THIS ARTICLE IN THE CITY OR AN ISSUER OR
OTHER ENTITY DESCRIBED IN SUBDIVISION ONE OF THIS SECTION TO FULFILL THE
TERMS OF ANY AGREEMENTS MADE WITH SUCH HOLDERS PURSUANT TO THIS ARTICLE,
OR IN ANY WAY IMPAIR THE RIGHTS AND REMEDIES OF SUCH HOLDERS OR THE
SECURITY FOR SUCH BONDS, UNTIL SUCH BONDS, TOGETHER WITH THE INTEREST
THEREON AND ALL COSTS AND EXPENSES IN CONNECTION WITH ANY ACTION OR
S. 8338 7
PROCEEDING BY OR ON BEHALF OF SUCH HOLDERS, ARE FULLY PAID AND
DISCHARGED. NOTHING CONTAINED IN THIS ARTICLE SHALL BE DEEMED TO
RESTRICT ANY RIGHT OF THE STATE TO AMEND, MODIFY, REPEAL OR OTHERWISE
ALTER STATUTES IMPOSING OR RELATING TO TAXES OR FEES, OR APPROPRIATIONS
RELATING THERETO. NEITHER THE AUTHORITY NOR THE CITY NOR ANY CORPORATION
ESTABLISHED BY THE CITY NOR ANY OTHER MUNICIPALITY OR ENTITY SHALL
INCLUDE WITHIN ANY RESOLUTION, CONTRACT OR AGREEMENT WITH HOLDERS OF ANY
BONDS ISSUED UNDER THIS ARTICLE ANY PROVISION WHICH PROVIDES THAT A
DEFAULT OCCURS AS A RESULT OF THE STATE OR A POLITICAL SUBDIVISION OF
THE STATE EXERCISING ITS RIGHT TO AMEND, MODIFY, OR REPEAL OR OTHERWISE
ALTER ANY STATUTE IMPOSING OR RELATING TO TAXES, FEES, OR APPROPRIATIONS
RELATING THERETO. NOTHING IN THIS ARTICLE SHALL BE DEEMED TO OBLIGATE
THE STATE OR ANY POLITICAL SUBDIVISION OF THE STATE TO MAKE ANY PAYMENTS
OR IMPOSE ANY TAXES TO SATISFY THE DEBT SERVICE OBLIGATIONS OF ANY OF
THE AUTHORITY, THE CITY, ANY CORPORATION ESTABLISHED BY THE CITY, OR ANY
OTHER MUNICIPALITY OR ENTITY.
3. THE BONDS ARE HEREBY MADE SECURITIES IN WHICH ALL PUBLIC OFFICERS
AND BODIES OF THE STATE AND ALL PUBLIC CORPORATIONS, MUNICIPALITIES AND
MUNICIPAL SUBDIVISIONS, ALL INSURANCE COMPANIES AND ASSOCIATIONS AND
OTHER PERSONS CARRYING ON AN INSURANCE BUSINESS, ALL BANKS, BANKERS,
TRUST COMPANIES, SAVINGS BANKS AND SAVINGS ASSOCIATIONS INCLUDING
SAVINGS AND LOAN ASSOCIATIONS, BUILDING AND LOAN ASSOCIATIONS, INVEST-
MENT COMPANIES AND OTHER PERSONS CARRYING ON A BANKING BUSINESS, ALL
ADMINISTRATORS, CONSERVATORS, GUARDIANS, EXECUTORS, TRUSTEES AND OTHER
FIDUCIARIES, AND ALL OTHER PERSONS WHATSOEVER WHO ARE NOW OR MAY HERE-
AFTER BE AUTHORIZED TO INVEST IN BONDS OR IN OTHER OBLIGATIONS OF THE
STATE, MAY PROPERLY AND LEGALLY INVEST FUNDS, INCLUDING CAPITAL, IN
THEIR CONTROL OR BELONGING TO THEM. THE BONDS ARE ALSO HEREBY MADE SECU-
RITIES WHICH MAY BE DEPOSITED WITH AND MAY BE RECEIVED BY ALL PUBLIC
OFFICERS AND BODIES OF THE STATE AND ALL MUNICIPALITIES AND PUBLIC
CORPORATIONS FOR ANY PURPOSE FOR WHICH THE DEPOSIT OF BONDS OR OTHER
OBLIGATIONS OF THE STATE IS NOW OR MAY HEREAFTER BE AUTHORIZED.
4. (A) IT IS HEREBY DETERMINED THAT THIS ARTICLE AND THE CARRYING OUT
OF ITS PURPOSES ARE IN ALL RESPECTS FOR THE BENEFIT OF THE PEOPLE OF THE
STATE AND FOR A PUBLIC PURPOSE. ACCORDINGLY, THE CITY OR AN ISSUER OR
OTHER ENTITY DESCRIBED IN SUBDIVISION ONE OF THIS SECTION SHALL BE
REGARDED AS PERFORMING AN ESSENTIAL GOVERNMENTAL FUNCTION IN THE EXER-
CISE OF THE POWERS CONFERRED UPON IT PURSUANT TO THIS ARTICLE AND SHALL
NOT BE REQUIRED TO PAY ANY FEES, TAXES, SPECIAL AD VALOREM LEVIES OR
ASSESSMENTS OF ANY KIND, INCLUDING, BUT NOT LIMITED TO, FRANCHISE TAXES,
SALES TAXES OR OTHER TAXES, UPON OR WITH RESPECT TO ANY PROPERTY OWNED
BY IT, OR UPON THE USES THEREOF, OR UPON OR WITH RESPECT TO ITS ACTIV-
ITIES OR OPERATIONS IN FURTHERANCE OF THE POWERS CONFERRED UPON IT
PURSUANT TO THIS ARTICLE, OR UPON OR WITH RESPECT TO ANY RENTALS, RATES,
CHARGES, FEES, REVENUES OR OTHER INCOME RECEIVED BY IT. PROVIDED THAT
THE AUTHORITY, THE CITY AND ANY ENTITY CREATED PURSUANT TO THIS ARTICLE
SHALL BE REQUIRED TO REGISTER WITH THE COMMISSIONER OF TAXATION AND
FINANCE UNDER SECTION ELEVEN HUNDRED THIRTY-FOUR OF THE TAX LAW, COLLECT
SALES AND COMPENSATING USE TAXES ON ITS SALES OF PROPERTY AND SERVICES
OF A KIND ORDINARILY SOLD BY PRIVATE PERSONS, AND COMPLY WITH THE OTHER
PROVISIONS OF ARTICLES TWENTY-EIGHT AND TWENTY-NINE OF THE TAX LAW
APPLICABLE TO SUCH SALES.
(B) THE BONDS TOGETHER WITH THE INCOME THEREFROM SHALL AT ALL TIMES BE
EXEMPT FROM TAXATION.
(C) THE STATE HEREBY COVENANTS WITH THE PURCHASERS AND WITH ALL SUBSE-
QUENT HOLDERS AND TRANSFEREES OF BONDS, IN CONSIDERATION OF THE ACCEPT-
S. 8338 8
ANCE OF AND PAYMENT FOR THE BONDS, THAT THE BONDS AND THE INCOME THERE-
FROM AND ALL REVENUES, MONIES, AND OTHER PROPERTY PLEDGED TO PAY OR TO
SECURE THE PAYMENT OF SUCH BONDS SHALL AT ALL TIMES BE FREE FROM TAXA-
TION PROVIDED THAT THIS PARAGRAPH SHALL NOT CONSTITUTE AN EXEMPTION OR
EXCLUSION APPLICABLE TO TRANSACTION OR EXCISE TAXES, INCLUDING BUT NOT
LIMITED TO SALES AND COMPENSATING USE TAXES OR EXCISE TAXES.
5. NOTWITHSTANDING ANY PROVISION OF THE UNIFORM COMMERCIAL CODE TO THE
CONTRARY, ANY PLEDGE OF OR OTHER SECURITY INTEREST IN REVENUES, MONEYS,
ACCOUNTS, CONTRACT RIGHTS, GENERAL INTANGIBLES OR OTHER PERSONAL PROPER-
TY MADE OR CREATED PURSUANT TO THIS ARTICLE SHALL BE VALID, BINDING AND
PERFECTED FROM THE TIME WHEN SUCH PLEDGE IS MADE OR OTHER SECURITY
INTEREST ATTACHES WITHOUT ANY PHYSICAL DELIVERY OF THE COLLATERAL OR
FURTHER ACT, AND THE LIEN OF ANY SUCH PLEDGE OR OTHER SECURITY INTEREST
SHALL BE VALID, BINDING AND PERFECTED AGAINST ALL PARTIES HAVING CLAIMS
OF ANY KIND IN TORT, CONTRACT OR OTHERWISE AGAINST THE PLEDGOR IRRESPEC-
TIVE OF WHETHER OR NOT SUCH PARTIES HAVE NOTICE THEREOF. NO INSTRUMENT
BY WHICH SUCH A PLEDGE OR SECURITY INTEREST IS CREATED NOR ANY FINANCING
STATEMENT NEED BE RECORDED OR FILED.
6. WHETHER OR NOT THE BONDS ARE OF SUCH FORM AND CHARACTER AS TO BE
NEGOTIABLE INSTRUMENTS UNDER THE TERMS OF THE UNIFORM COMMERCIAL CODE,
THE BONDS ARE HEREBY MADE NEGOTIABLE INSTRUMENTS WITHIN THE MEANING OF
AND FOR ALL THE PURPOSES OF THE UNIFORM COMMERCIAL CODE, SUBJECT ONLY TO
THE PROVISIONS OF THE BONDS FOR REGISTRATION.
S 119-II. SEVERABILITY. IF ANY CLAUSE, SENTENCE, PARAGRAPH, SECTION,
OR PART OF THIS ARTICLE SHALL BE ADJUDGED BY ANY COURT OF COMPETENT
JURISDICTION TO BE INVALID, SUCH JUDGMENT SHALL NOT AFFECT, IMPAIR OR
INVALIDATE THE REMAINDER THEREOF, BUT SHALL BE CONFINED IN ITS OPERATION
TO THE CLAUSE, SENTENCE, PARAGRAPH, SECTION, OR PART THEREOF INVOLVED IN
THE CONTROVERSY IN WHICH SUCH JUDGMENT SHALL HAVE BEEN RENDERED.
S 6. This act shall take effect immediately.
